The struggling telecoms equipment maker Marconi has said that its shareholders are set to be left with virtually nothing following a financial restructuring at the firm.

The company said that current shareholders are likely to be end up holding just 0.5% of share capital.

Marconi owes about �4bn to its banks and bondholders, and it said on Wednesday that talks aimed at saving the company were still continuing.

The final deal is expected to give its creditors virtually full control of the company through a debt for equity swap.

In a statement, Marconi said that "it is currently envisaged that existing holders of Marconi ordinary shares would receive 0.5% of the share capital".

That firm added that shareholders are also set to get warrants allowing the purchase of 5% of the issued share capital, subject to certain criteria. It is unclear when they will be able to buy these shares or at what price.

Not final yet

Marconi warned that negotiations were ongoing and details "may be subject to change".

Marconi's troubles led to the departure of Lord Simpson last year

The financial restructuring is expected to lead to Marconi PLC effectively being sold to its creditors, with a new business, Marconi Corporation, being created.

The company said that the new structure being discussed was designed "to provide flexibility for Marconi Group's ongoing success, maximise cash and overall recovery for creditors and allow existing Marconi shareholders to maintain an ongoing economic interest in the Group".

The company added that it expected to be left with a debt of �300m following the deal.

Fall from grace

Marconi transformed itself from an industrial business - it was previously called GEC - into a telecoms company at the height of the dot.com boom.

But when worldwide demand for telecoms equipment dried up the company was plunged into crisis.

It has shed more than 13,000 jobs and sold off business in an attempt to cut costs.

And Marconi's woes led to the departure of chief executive Lord Simpson and finance director John Mayo last year.

At their peak, Marconi shares were worth �12.40 each, valuing the firm at nearly �35bn.

On Wednesday the shares closed at just 1.70p, giving the firm a value of below �50m.

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Are you a Marconi shareholder who has suffered big losses? Or are you the victim of a different corporate collapse?

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Your e-mails so far:

In 1999 in put all of my savings into two companies - QXL and Axiomlab. All 4 grand of it diminished to less than a few hundred quid. Already in debt, I foolishly decided to get a personal loan and put the lot into Marconi when they had crashed to 298p. The price seemed good. Now they are almost worthless. The experience has taught me never to gamble with the market again. I have been stung so many times now. In the past, I made a bit, then lost a lot. I never could get it right. Now I have to pay the consequences. Two jobs and plenty of overtime for the next couple of years.
nick, england

My husband worked for GEC/Marconi for nearly 20 years. He thought he had saved carefully for his retirement. Instead we have lost all our savings and face a bleak future. How can Lord Simpson destroy an excellent company and wreck thousands of lives yet demand a million pounds and get it for being such a failure.

Why isn't he made to stand trial and face justice.
Heather Hobden, UK

I am a casualty of the depression following a policy of holding on to shares for the long term to finance my retirement. My portfolio included Marconi, BT, Railtrack, Scoot, Future Integrated Telephony, Ionica,and others who have been liquidated or restructured to save what was left of the company. I have lost �120K and feel an idiot .Impoverished, I find it difficult to believe in the rhetoric of George Brown of how the UK is prospering.This suspension of belief is further supported by the golden parachutes the leaders of the Nation enjoy.
Terry James, United Kingdom

I am a Marconi shareholder and I blame the shareholders who voted in favour of letting the company issue bonds.
This happens in a lot of other companies and shareholders who vote in favour of corporate bond issuance could face a similar fate.
If a company has faith in its strategies it should go to the shareholders with a proposal for financing through rights issue. Issuing bonds is the easy way out and shareholders are too quick to give the Board approval to make such issues.
Steve White, UK

I have little sympathy for Marconi shareholders. Owning shares is an investment but also a risk. Shares do you down as well as up. That is why good investors are rewarded and poor ones make losses.
bryan, UK

Worked in the Defence Systems part of Marconi which was sold to BAE Systems Ltd.

My share option scheme matured in time to buy Marconi Shares. Lost all that money. Could not believe what happened. Simpson should stand some sort of trial for all the job losses and financial losses suffered.

I'm still shell-shocked. I had worked for Marconi over 10 years.
Jo Tayler, England

After being strung with Energis earlier in the year, Marconi is just rubbing salt into the wound - I understand the risks of stock market investment, but it's no wonder people are looking to put money into property when shareholders are treated like this.
Gary, UK

My mother died at the end of 1999, when the Marconi shares were about �10 each and her holding was worth around �100,000. So the Government ended up with �40,000 Inheritance Tax and the family inherited worthless bits of paper.
David Dew, UK

I think its appalling that Simpson and Mayo got an �x million handshake and walked into other jobs, when thousands of people lost their jobs and the shares were left without any value. I think Simpson, Mayo and the rest of their team should be made to pay back their money.
Manuel Martinez, UK

As an ex-employee and shareholder I believe George Simpson should be held personally liable for what he has done to this great company!!
Paul, UK

It looks like I've lost the 5k i've got invested in Marconi. I blame the management who spent money on stupid things like private jets and millions invested in computer systems that they didn't use! Cheers!
Anon, Manchester, UK

I have 4,500 shares and I feel the company have defrauded the shareholders and the senior management should be held accountable and they should lose all their personal wealth created as a result of Marconi
Wendy Bishop, UK

I and many of my work colleagues have lost substantial ammounts because of the debacle of Marconi. We were former GEC employees who were hived off to BAE at the time of the GEC/BAE merger in 1999 and had been saving in share option schemes for years. To rub salt in the wounds we have been hit with a double-wammy as the Inland Revenue is claiming Capital Gains tax from thousands of individuals as the rules of the IR calculate gain as the paper gain (without selling) at the time of option exercise when shares were around �9 or �10 each. One work colleague has a �6000 tax demand on worthless shares. It appears scandalous that the whole affair is legal. Did the Marconi board have Enron people as advisers?
Barrie Bray, UK

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